It Is Time To Tax Tall People

That, at least, is one possible takeaway from a new paper by Gregory Mankiw and Matthew Weinzierl that National Bureau of Economic Research spit into my inbox a couple of days ago. (Link here, though it's subscription only.) The paper has two steps. First, they argue that the consensus among utilitarian optimal tax theorists is that we should be taxing productivity. (Since income is a function of productivity and effort, and we do not want to discourage effort.) Second, they argue that a person's height is strongly correlated with their productivity. So why not tax tall people?

The answer, of course, is that a tax on tall people seems like a pretty horrible thing to have. (Kurt Vonngeut's "Harrison Bergeron" handled this back in 1961.) And, indeed, the point of the paper is to tease out that moral intuition. As Mankiw and Weinzierl write: "This paper can be interpreted in two ways. Some readers can take it as a small, quirky contribution aimed to clarify the literature on optimal income taxation. Others can take it as a broader effort to challenge that entire literature." Yeah, right. It's very kind of them to offer a choice, but I have the funny feeling they're hoping for something more than a "small, quirky" interpretation of their work.

On the other hand, I'm surprised to see the strong utilitarian view described as the consensus. I don't know much about utilitarian optimal tax theory, but I also don't know of any public finance or policy people who are dying to revive the prescriptive insights of Jeremy Bentham and Francis Edgeworth. Is there a cult of utilitarian social planners out there waiting to propose taxes on inputs like height, intelligence and race?

Update: Mankiw responds here with a restatement of the paper's purpose. I cobbled together a response to that here, and Emmanuel Saez responds by email here.

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Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian.